Summary of Conference Call Notes Industry Overview - The electronic fabric market is experiencing a strong price increase, with notable price points for various products. For instance, the mainstream price for electronic yarn G75 is reported to be between 10,400-10,700 RMB/ton, while the prices for different types of electronic fabric are as follows: 7628 electronic fabric at 5.3-5.5 RMB/m, 2116 electronic fabric at 6.1 RMB/m, and 1080 electronic fabric at 6.3 RMB/m [1][3]. Key Insights - The price of 7628 electronic fabric has increased by 0.75 RMB/m compared to the end of last year, driven by several factors: 1. Slow expansion of weaving machine production capacity, with some companies switching equipment to produce low-dielectric products required for AI, thereby reducing the production of ordinary 7628 electronic fabric. 2. Production of ultra-fine and ultra-thin electronic fabric by a single weaving machine may result in a loss of over 50% of capacity due to production difficulties and differences in yarn density [1][3]. - There is an expectation that the price increase trend for electronic fabric may continue in the short term [2]. - By 2026, the supply and demand for ordinary electronic yarn may reach a balance, but the ordinary electronic fabric may still face supply constraints due to a shortage of weaving machines, which provides a basis for potential price increases [3]. Additional Important Points - The new production capacity for electronic yarn by 2026 includes: 1. A 100,000-ton production line by China Jushi in Huai'an, expected to start in March-April. 2. A 70,000-ton electronic yarn project by Jiantao Chemical. 3. An 85,000-ton ordinary electronic yarn project by International Composite Materials, which was launched at the end of December 2025, with plans for potential upgrades to older lines [3]. - Leading companies may optimize their product structures, with significant profit elasticity for ordinary electronic fabric. In Q3 2021, the average price of 7628 electronic fabric was 8.8 RMB/m, while China Jushi's non-tax selling price for electronic fabric was 6.7 RMB/m, yielding a net profit of 2.8 RMB/m, indicating substantial profit potential at current price levels [4]. - If the price of electronic fabric increases by 1 RMB/m, it could lead to a profit increase of 1 billion RMB for companies with an effective production capacity of 1.1-1.2 billion meters of electronic fabric [4].

普通电子布价格边际提涨 中金发布研报称，近期电子纱市场价格涨势较强。该行判断普通电子纱或供需平衡，但普通电子布和超 细超薄电子布或具备阶段性提价基础。该行判断短期内电子布提价行情或仍持续。龙头企业或优化产品 结构，普通电子布盈利弹性较大。该行维持覆盖标的盈利预测、目标价和评级不变。 中金主要观点如下： 行业近况 根据卓创资讯，近期电子纱市场价格涨势较强。以林州光远为例，电子纱G75 对外主流报价达到10400- 10700 元/吨;7628电子布市场主流报价5.3-5.5 元/米，2116 电子布报价6.1 元/米，1080 电子布报价6.3 元/ 米。以7628 为例，当前时点含税价较去年底已提升0.75 元/米，提价基础包括：①织布机扩产慢，部分 企业将设备切换至生产AI所需低介电产品，进而减少7628 普通电子布生产;②单台织布机生产超细、超 薄电子布或损耗至少50%以上产能，主要由于生产难度、纱密度差异等。 电子布需求不及预期、供给释放超预期等。 根据卓创资讯，近期电子纱市场价格涨势较强，以林州光远为例，电子纱G75 对外主流报价达到10400- 10700 元/吨;7628 电子布市场主流报价5.3 ...

Investment Rating - The report rates the fiberglass industry as "Overweight" indicating a positive outlook for the sector [2][18]. Core Insights - The price of fiberglass fabric 7628 has increased significantly, with Linzhou Guangyuan and International Composites raising prices by 0.65 CNY/m and 0.55 CNY/m respectively, bringing the prices to 5.5 CNY/m and 5.2 CNY/m [4]. - The demand for integrated circuit boards in China has shown robust growth, with a record production of 48.1 billion units in December 2025, marking a historical high [4]. - Supply constraints are evident due to rising platinum and rhodium prices, which have increased the capital expenditure requirements for production, thereby slowing down capacity expansion [4]. - Major companies like China Jushi are expected to benefit from the price increases, with projected production capacities for 2026 being 1.1 billion meters for China Jushi, 600 million meters for China National Building Material, and others [4]. - Ibiden announced a capital expenditure of 500 billion JPY (approximately 3.2 billion USD) over three years to increase production capacity for IC substrates, which will positively impact the demand for Low CTE fabrics [4]. - The report suggests focusing on companies like China Jushi, International Composites, and China National Building Material due to their favorable positions in the market [4]. Summary by Sections Price Trends - The report highlights a continuous increase in prices for electronic yarn and fabric throughout 2026, indicating a strong market recovery [5]. Production Capacity - Domestic electronic yarn production capacity is entering a phase of declining growth, which may impact supply dynamics in the future [6]. Company Valuations - The report provides a valuation table for key companies in the construction materials sector, with China Jushi rated as "Buy" at a price of 21.76 CNY and a market cap of 87.11 billion CNY [13].

Group 1: Consumer Building Materials - The consumer building materials industry is experiencing a recovery in retail demand, driven by high second-hand housing activity and subsidy policies, with leading companies showing strong operational resilience [1] - Long-term demand stability and increasing industry concentration suggest significant growth potential for quality leading companies in the consumer building materials sector [1] - Key companies to watch include Sanhe Tree, Rabbit Baby, Hanhai Group, Oriental Yuhong, China Liansu, Beixin Building Materials, Weixing New Materials, Dongpeng Holdings, Jianlang Hardware, Arrow Home, Mona Lisa, Keshun Shares, Zhit New Materials, and Wangli Security [1] Group 2: Cement Industry - The national average cement price is reported at 351 RMB/ton, reflecting a week-on-week decrease of 0.1% and a year-on-year drop of 74.33 RMB/ton [2] - The national cement shipment rate stands at 45.93%, remaining stable week-on-week but down 7.87 percentage points year-on-year [2] - The cement industry is currently at a historical valuation low, with companies to focus on including Huaxin Cement (A, H), Conch Cement (A, H), Shangfeng Cement, China Resources Cement Technology, and Taipai Group [2] Group 3: Glass Industry - The average price of float glass is 1208 RMB/ton, showing a week-on-week increase of 1.0% but a year-on-year decrease of 15.1% [3] - Inventory days for glass have decreased by 0.67 days, currently at 29.61 days [3] - Key companies in the glass sector with low valuations include Qibin Group, Xinyi Solar, Flat Glass (A), Flat Glass (H), Xinyi Glass, Nanshan Glass A, and Shandong Pharmaceutical Glass [3] Group 4: Glass Fiber and Carbon-Based Composites - The market price for direct yarn remains stable, with mainstream prices for 2400tex yarn ranging from 3250 to 3700 RMB/ton, reflecting a year-on-year increase of 0.95% [4] - Electronic yarn prices are stable, with G75 mainstream quotes between 8800 and 9300 RMB/ton [4] - Leading companies in the glass fiber and carbon-based composite materials sector include China Jushi, China National Materials, Honghe Technology, and Changhai Co. [4]

Group 1: Cement Industry - The national cement market price has continued to decline by 0.7% week-on-week, with an average price of 347 RMB/ton as of October 17, 2025, reflecting a decrease of 2.33 RMB/ton month-on-month and 61.83% year-on-year [1] - The national cement shipment rate is at 45.20%, showing an increase of 0.67 percentage points week-on-week but a decrease of 10 percentage points year-on-year [1] - The industry valuation is at historical low levels, with a positive outlook for leading companies such as Conch Cement and Huaxin Cement, while also monitoring China Resources Cement Technology, Shangfeng Cement, and Tapai Group [1] Group 2: Glass Industry - The price of float glass has experienced a decline of 2.1% week-on-week, with an average price of 1276 RMB/ton as of October 17, 2025, while showing a year-on-year increase of 1.5% [2] - Inventory days for glass have increased to 29.09 days, up by 4.29 days since September 30 [2] - The leading glass companies are currently undervalued, with a favorable outlook for Qibin Group, Shandong Yaobang, and Fuyao Glass, while also keeping an eye on Jinjing Technology and Linuo Photovoltaic [2] Group 3: Fiberglass and Carbon-based Composites - The market for fiberglass yarn is stable, with mainstream transaction prices for 2400tex winding direct yarn ranging from 3250 to 3700 RMB/ton, remaining flat compared to the previous week but down 3.93% year-on-year [3] - The price of electronic yarn G75 has increased by 3.03% compared to the previous week, with mainstream prices between 8800 and 9300 RMB/ton [3] - Leading companies in the fiberglass and carbon-based composite materials sector are significantly ahead, with a positive outlook for China Jushi, China National Materials, and Changhai Co., while also monitoring Jinbo Co. [3]

Investment Rating - The report maintains an "Overweight" rating for the construction materials industry [1]. Core Viewpoints - Short-term focus is on the "15th Five-Year Plan," while mid-term strategies await the economic work conference for direction [1]. - The construction materials sector has shown a decline of 4.11% this week, underperforming compared to the Shanghai and Shenzhen 300 index, which fell by 2.22% [4]. - The report highlights the importance of domestic circulation and technological advancements in the industry, particularly in the context of the upcoming economic policies [4]. Summary by Sections 1. Bulk Construction Materials Fundamentals and High-Frequency Data - **Cement**: The national average price for high-standard cement is 346.8 CNY/ton, down by 2.3 CNY/ton from last week and down 61.8 CNY/ton from the same period in 2024. The average cement inventory ratio is 67.3%, up 0.6 percentage points from last week [4][20][15]. - **Glass**: The average price for float glass is 1301.0 CNY/ton, up 11.2 CNY/ton from last week and up 46.6% from 2024. Inventory levels have increased, indicating a potential oversupply [45][51]. - **Fiberglass**: The market for fiberglass remains stable, with prices for non-alkali yarn around 3250-3700 CNY/ton, showing a year-on-year decline of 3.93% [4][6]. 2. Industry Dynamics Tracking - The report notes that the cement market is experiencing weak demand, particularly in northern regions due to weather conditions, while southern regions face financial constraints [13][14]. - The glass market is characterized by high inventory levels and weak demand, leading to price fluctuations [44][51]. - The report emphasizes the need for supply-side reforms and the potential for price stabilization in the fiberglass sector as excess capacity is addressed [7][8]. 3. Weekly Market Review and Sector Valuation - The construction materials sector's valuation is at historical lows, with expectations for policy support to enhance profitability and valuation recovery [4][6]. - The report suggests that leading companies in the cement industry, such as Huaxin Cement and Conch Cement, are well-positioned to benefit from industry consolidation and improved market conditions [4][6].

Group 1 - The core viewpoint of the article highlights that several companies in the fiberglass industry have raised prices by 5%-10% due to ongoing losses and factors such as US-China tariffs, indicating initial success in industry self-discipline and a potential increase in profitability for the fiberglass sector [1][2] - The China Glass Fiber Industry Association approved the "Self-Discipline Convention for the Glass Fiber and Products Industry" on December 25, 2024, with nine major companies, including China Jushi and Taishan Fiberglass, committing to this self-regulation [1][2] Group 2 - In the construction materials sector, the demand for retail building materials is recovering, supported by high demand in the second-hand housing market and subsidy policies, with strong resilience observed in leading companies [3] - The national average price of cement has decreased by 0.5% week-on-week, with a current price of 343 RMB/ton, while the cement shipment rate stands at 45.73%, indicating a slight recovery in the market [4] - The average price of float glass has weakened slightly, with a current price of 1190 RMB/ton, while photovoltaic glass prices have increased, reflecting mixed market conditions [5] - The price of direct yarn in the fiberglass/carbon-based composite market remains stable, with electronic yarn prices holding steady, indicating a stable market environment for leading companies [6]

Investment Rating - The report maintains an "Overweight" rating for the building materials industry [2]. Core Insights - The real estate sector remains in a weak economic environment, but changes on the supply side are more promising [1]. - The cement sector is expected to benefit from demand driven by urban renewal and supply restrictions, leading to improved market conditions [4][7]. - The report highlights the potential for price increases in waterproofing products, which could enhance industry profit margins [7]. Summary by Sections Industry Overview - The building materials industry consists of 73 listed companies with a total market value of 838.733 billion yuan and a circulating market value of 789.313 billion yuan [2]. - The report notes a decline in real estate development investment, with a 12% year-on-year decrease, and a 4% drop in commercial housing sales area [7]. Key Companies - North New Building Materials: EPS forecast for 2024A is 2.2 yuan, with a "Buy" rating [5]. - Conch Cement: EPS forecast for 2024A is 1.5 yuan, with a "Buy" rating [5]. - China Jushi: EPS forecast for 2024A is 0.6 yuan, with a "Buy" rating [5]. - Weixing New Materials: EPS forecast for 2024A is 0.6 yuan, with a "Buy" rating [5]. - Sankeshu: EPS forecast for 2024A is 0.5 yuan, with an "Overweight" rating [5]. - Huaxin Cement: EPS forecast for 2024A is 1.2 yuan, with a "Buy" rating [5]. - Shandong Pharmaceutical Glass: EPS forecast for 2024A is 1.4 yuan, with a "Buy" rating [5]. - Qibin Group: EPS forecast for 2024A is 0.1 yuan, with an "Overweight" rating [5]. - Dongfang Yuhong: EPS forecast for 2024A is 0.1 yuan, with a "Buy" rating [5]. - Jianlang Hardware: EPS forecast for 2024A is 0.3 yuan, with a "Buy" rating [5]. - China National Materials: EPS forecast for 2024A is 1.5 yuan, with a "Buy" rating [5]. Market Trends - The cement market saw a 0.2% increase in prices, with specific regions experiencing price hikes of 10-30 yuan per ton [31]. - The national cement output for January to July 2025 was 958 million tons, a 4.5% year-on-year decrease [7]. - The report anticipates a steady upward trend in cement prices due to rising coal costs and improved demand conditions [31]. Recommendations - The report recommends focusing on companies that are likely to benefit from supply restrictions and urban renewal projects, such as Huaxin Cement and Conch Cement [7][8]. - It also suggests monitoring companies in the waterproofing sector, like Dongfang Yuhong, for potential profit margin improvements [7].

Core Viewpoint - The construction materials industry is facing challenges due to low demand for cement, with average shipment rates around 44%, and prices hitting or falling below cost levels, exacerbated by rising coal prices [1][6]. Investment Highlights - The construction materials sector saw a weekly change of 1.19%, underperforming the Shanghai Composite and Wind All A indices, which changed by 1.23% and 1.94% respectively [2]. - The national average price for high-standard cement is 339.7 yuan/ton, unchanged from the previous week but down 42.5 yuan/ton compared to the same period last year [3]. - The average cement inventory level among sample enterprises is 67.4%, up 1.2 percentage points from last week and 1.1 percentage points from the same period last year [3]. Cement Market Analysis - The cement market is experiencing low demand due to high temperatures and rainfall, with companies in key regions discussing staggered production to alleviate operational pressures [6]. - There is a consensus on supply discipline within the industry, which may lead to better profitability compared to last year, with potential price increases expected in mid-August [6]. - The sector's price-to-book ratio is at historical lows, and industry policies may drive profitability recovery and valuation improvement [6]. Glass Fiber Market Insights - The electronic glass fiber market is seeing an upgrade trend, with high-end products expected to gain market share due to technological advancements [7]. - The ordinary glass fiber market remains under pressure, but demand in wind power and thermoplastics is expected to grow, supporting mid-term profitability [8]. - Leading companies in the glass fiber sector are positioned to benefit from structural adjustments and increasing demand in emerging applications [8]. Glass Industry Overview - The glass industry is facing significant losses, but supply-side contractions may improve the short-term supply-demand balance, with potential price stabilization [9]. - The industry is expected to benefit from policy measures aimed at reducing excess capacity, with leading companies likely to enjoy cost advantages and excess profits [9]. Renovation and Building Materials Sector - Increased external uncertainties and government policies aimed at boosting domestic demand are expected to enhance consumption in the home improvement and building materials sector [10]. - The market for home improvement materials is anticipated to improve, with leading companies likely to see valuation recovery as consumer confidence strengthens [10]. - Companies are exploring new business models and extending their supply chains to enhance efficiency and pricing power [10].

Investment Rating - The report maintains a "Recommendation" rating for the company, with a target price of 16 yuan [2][10]. Core Views - The company achieved a revenue of 4.479 billion yuan in Q1 2025, representing a year-on-year growth of 32.42%, and a net profit attributable to shareholders of 730 million yuan, up 108.52% year-on-year [2][9]. - The recovery in prices has released profit potential, and the company's scale advantages are becoming more pronounced [2][9]. - The demand in the fiberglass industry is expected to increase, driven by growth in downstream applications such as consumer electronics and AI, which will boost the demand for high-end electronic fabrics [9][10]. - The company has improved its gross margin to 30.5% in Q1 2025, a year-on-year increase of 10.4 percentage points, due to improved volume and price dynamics [9][10]. - The company’s operating cash flow has improved year-on-year, with a decrease in expense ratios, indicating better cost management [9][10]. Financial Summary - For 2025, the company is projected to have total revenue of 17.415 billion yuan, with a year-on-year growth rate of 9.8% [5][10]. - The net profit attributable to shareholders is expected to be 3.205 billion yuan in 2025, reflecting a growth rate of 31.1% [5][10]. - The earnings per share (EPS) for 2025 is estimated at 0.80 yuan, with a price-to-earnings (P/E) ratio of 15 times [5][10]. - The company’s total assets are projected to reach 63.085 billion yuan by 2026, with a debt-to-equity ratio of 50.5% [10].